* Activists set up protest camp near settlement site
* Urge U.S. president to take up their cause
Palestinian activists set up a protest camp on Wednesday close to where Israel wants to build a new settlement in the occupied West Bank, drawing attention to their struggle during a visit to the region by U.S. President Barack Obama.
Over a hundred demonstrators erected four large, steel-framed tents and a massive Palestinian flag on the rugged, rocky tract near Jerusalem, just as Obama arrived in nearby Tel Aviv for three days of talks and meetings.
"We are here to send a message to President Obama, our struggle, our non-violent peaceful resistance will continue until we are free," said senior Palestinian politician Mustafa Barghouthi, standing on the windy outcrop.
Israeli police entered the tent colony and told protesters to clear the area, which they called a "closed military zone," but did not immediately try to tear down the camp.
Obama was holding talks with Israeli Prime Minister Benjamin Netanyahu on Wednesday and is due to travel to the West Bank on Thursday to meet Palestinian President Mahmoud Abbas.
He has said he was coming to listen and would not bring a new peace initiative, three years after the last direct negotiations between the Israelis and Palestinians broke down over the question of Jewish settlement construction.
Palestinians complain that Obama has not put enough pressure on Israel to halt the settlements and warn that the prospect of creating a viable, independent state is fading fast.
Netanyahu announced in December plans to build hundreds of settler homes in a sensitive area on Jerusalem's outskirts that is known by its administrative name E1.
If construction goes ahead, E1 would create a linked-up stretch of Jewish neighbourhoods in the West Bank between Pisgat Zeev and Maale Adumim, a settlement of some 30,000 Israelis.
Palestinians say this would destroy hopes of tying together their communities across East Jerusalem, which they want as the capital of their country.
In the West Bank city of Hebron, a cauldron of tension between Palestinians and Israeli settlers, dozens of school-age Palestinian children wore Obama masks to protest at his visit and marched through the streets.
Israeli forces arrested several of the demonstrators who were marching through Shuhada Street, the city's Palestinian commercial hub until Israel unilaterally closed it in 1994.
"We say to Obama, visiting occupied Palestine is a terrible idea. If you want peace for two states, seek justice for us," said Jamal Jafar, an activist involved in Wednesday's protest.
Palestinian activists have repeatedly established tent camps in areas close to Israeli settlements in recent months in a bid to throw a spotlight on unhindered Jewish construction.
All the sites were subsequently demolished by Israeli forces, who say they present a security risk and lack building permits. A handful of Israeli soldiers gathered on the fringes of Wednesday's camp, but did not try to dislodge it.
Slightly angrier protests against Obama's visit flared in the Gaza Strip, a Mediterranean enclave bordering Israel and Egypt from which Israel withdrew settlers in 2005.
Demonstrators set fire to posters of Obama and to U.S. flags, saying the president's trip would make no difference to Palestinian aspirations.
"Palestinian blood is on your hands Obama" read one banner. Another said: "Obama, the Hitler of the 21st century."
Kayed Al-Ghoul, a senior leader of the Popular Front for the Liberation of Palestine (PFLP), said all Palestinian factions agreed that Obama's arrival would only solely Israel's purposes.
"At this time, the visit aims to support the newly formed Israeli government and put pressure on the Palestinian leadership to return to bilateral talks that have proven to be a failure," he said.